Domino's Pizza: Pizza Turnaround

BUSINESS SITUATION AND CAMPAIGN OBJECTIVES

A Struggling Business in a Declining Industry

In late 2009, the pizza category was in decline and the nation's three largest pizza companies were struggling. While overall U.S. fast-food had grown 6.4% from 2002 to 2007, pizza sales had risen only 2.5% during that period. Squeezed between healthier and fresher dining options on one side and less expensive burger and sandwich players on the other, pizza had fallen out of favor with American consumers. Papa John's predicted 2010 U.S. franchised same-store sales would be flat to down 1%. Pizza Hut expected modest domestic growth. And the prognosis for Domino's, whose same-store sales had been flat or down for four straight years, was dim. The company's share price was down more than 50% since early 2008. Wall Street analysts were dubious about a near-term recovery, with Citigroup forecasting “below-average top-line trends” through 2010. [Source: “A Smaller Piece of the Pie", WSJ, February 23, 2009.]